Eleco Interim Report 2012

Eleco plc, Interim Report 2012. Eleco is a UK, AIM-listed company, which is engatged in software development and building systems. (AIM:ELCO)

Eleco plc | Interim Report 2012
Building on Technology 速
Building on technology®
Eleco plc is a UK, AIM-listed company, which is engaged in software development
and building systems. (AIM:ELCO)
Eleco comprises ElecoSoft® and ElecoBuild®
Develops and delivers great ideas and outstanding
software and services with cutting edge technology
to the project management, construction,
pharmaceutical, timber engineering and design,
3D visualisation, data compression, site control,
stair design, flooring and marketing sectors
principally in the UK, Scandinavia and Germany.
Designs, manufactures and supplies off-site
building systems to deliver materials efficiency and
improved construction speed while maintaining a
high level of quality in metal roofing and cladding,
acoustic flooring, partitioning panels and precast
concrete, principally in the UK.
he past three years have been about steering Eleco through financial and trading conditions,
T
the severity of which have been unprecedented. These conditions have abated to a degree, but continue
to be challenging. Against this background, our management have had to take some very difficult decisions
and actions in their efforts to return Eleco to profitability and they remain committed to achieving this
objective, for the benefit of shareholders and employees alike. I continue to believe that further to our
restructuring, Eleco is well placed to take advantage of improvements in the markets it serves and I look
forward to our capturing the benefits of these changes over the coming months.
John Ketteley – Executive Chairman
Contents
Overview
1 Highlights
2 Chairman’s Statement
Financials
4
5
6
7
8
9
16
IBC
Condensed Consolidated Income Statement
Condensed Consolidated Statement of Comprehensive Income
Condensed Consolidated Statement of Changes in Equity
Condensed Consolidated Balance Sheet
Condensed Consolidated Statement of Cash Flows
Notes to the Condensed Consolidated Interim Financial Statements
Board of Directors and Company Advisors
Group Directory
For additional information
visit www.eleco.com
www.eleco.com
1
Highlights
Six months to 30 June
2012
£’000
Continuing operations
Revenue
Operating profit/(loss) before exceptionals
Loss before interest and tax
Loss for the period
Loss per share
Product development spend
2011
£’000
18,354 18,255
48
(334)
(268)
(529)
(607)
(847)
(1.4)p
(6.1)p
1,128
964
ÆÆEleco’s strategy of reducing costs and capacity
in its building systems businesses, to bring them
more into line with reduced demand in the UK
construction industry together with its effort to
reduce its risk profile by continuing to invest in
its profitable software interests, has resulted in
a small profit from continuing operations for the
six months ended 30 June 2012.
(30 June 2011: £8.6m).
ÆÆDeferred consideration receivable held in Escrow
at 30 June 2012: £1.2m (30 June 2011: £nil).
ÆÆNon-UK revenue 35% of total Group revenue
(Half 1 2011: 37%).
precast concrete operations in the first half resulted
inevitably in additional exceptional costs, it is
anticipated that these changes will deliver operating
and financial benefits in the second half.
Six months operating loss before exceptionals
903
2012
ElecoBuild ®
Six months operating profit before exceptionals
2011
ElecoSoft ®
£903k
+3%
£(418)k
2012
(418)
2011
+99
+382
+261
+240
+4.7p
+164
ÆÆNet bank borrowings at 30 June 2012: £5.3m
ÆÆAlthough the closer co-ordination of the Group’s
876
Change
£’000
(655)
Overview
Financials
2
Eleco plc | Interim Report 2012
Chairman’s Statement
September 2012
John Ketteley
Executive Chairman
Group turnover for the six months ended
30 June 2012 improved slightly to £18.4m
(H1 2011: £18.3m restated), an increase
of 1 per cent compared with the same period
last year.
Revenue of our building systems businesses
in the UK (“ElecoBuild®”) in the period under
review was £10.1m (H1 2011: £10.3m), due
mainly to reduced levels of turnover from precast
concrete student accommodation and hotel
projects. However, this was partly offset
by higher turnover in our standard precast
concrete products and metal roofing
and cladding products businesses.
Turnover of our software businesses in
Sweden, Germany and the UK (“ElecoSoft®”)
reduced marginally to £8.2m (H1 2011: £8.5m),
due partly to the weakening of the Euro against
Sterling but also due to lower than anticipated
turnover in the UK. ElecoSoft®’s share of Group
turnover in the period was 45 per cent (H1 2011:
46 per cent).
Adjusted Group Operating Profit improved to
£48,000 (H1 2011: Loss £334,000), after the
deduction of product development costs and
the amortisation of intangible assets, but before
restructuring costs. Software development
costs were higher though at £1,118,000
(H1 2011: £952,000) although amortization
of intangible assets relating to software were
lower at £206,000 (H1 2011: £296,000).
Restructuring costs of £316,000 (H1 2011:
£195,000) during the period under review were
incurred following the reduction in capacity of
our loss making precast concrete businesses.
Regrettably, this change in the business saw
the need for significant redundancies across
both management and production employees
at Bell & Webster Concrete and Milbury Systems.
The process also involved the formation of
ElecoPrecast™ and the appointment to it of
John Stothard and Carol Lound as Managing
Director and Finance Director respectively.
Initial indications suggest that the restructuring
exercise is delivering the benefits we anticipated.
Net finance costs for the period reflect principally
the increased utilisation of the Group’s banking
facilities, higher interest charges and the net return
on the pension scheme assets and liabilities. In
the case of ElecoBuild®, finance costs amounted
to £430,000 (H1 2011: £240,000); and in the
case of ElecoSoft®, finance costs were £50,000
(H1 2011: £22,000); and Corporate was credited
with £268,000 of interest (H1 2011: £131,000).
The loss before tax from continuing operations
and after exceptional restructuring costs of
£316,000 (H1 2011: £195,000) was £480,000
(H1 2011: £660,000).
The Group loss for the period amounted
to £607,000, equivalent to 1.0p per share
(H1 2011: £847,000, equivalent to 1.4p per
share). The loss for the period from discontinued
operations was significantly lower at £252,000,
equivalent to 0.4p per share, compared with
the loss for H1 2011 of £2,789,000, equivalent
to 4.7p per share. Accordingly the loss per share
from total operations fell from 6.1p in the period
ended 30 June 2011 to 1.4p for the period
ended 30 June 2012.
The Group saw a pleasing and substantial
38 per cent reduction in its net bank debt
during the period to £5.3m (2011: £8.6m).
Eleco is also the beneficiary of an Escrow
Account of £1.2m regarding the sale of its
timber engineering businesses of which
£400,000 is payable in December 2012
and £800,000 in December 2013.
In the period under review, a further cash
contribution of £402,000 (H1 2011: £402,000)
was made to the defined benefit pension
scheme that closed to future accrual in
December 2009.
Dividend
With the Group not yet having returned to profit,
the Board is not in a position to recommend
the payment of an interim dividend. However,
the Board will keep its future dividend policy
closely under review and will consider a return
to recommending dividend payments as and
when the Company’s trading position and
performance permits.
Financial Review
Despite the Group’s solid progress in reducing its
fixed costs and restructuring certain businesses,
its financial performance during the period under
review was behind Board expectations. This is
in large part a reflection of the time lag that exists
between the implementation of our precast
concrete restructuring plan and the realisation
of its anticipated benefits.
Pension Scheme
On 10 September 2012, Eleco plc received
notification from the Trustees of The Eleco
Retirement Benefit Scheme (“the Scheme”)
of an obligation arising under Sections 75 and
75A of the Pensions Act 1995, pursuant to which,
Eleco plc, the parent company of the Group,
was required to discharge an obligation of
£595,000, as certified by the Scheme Actuary,
for the purpose of funding that proportion of
the deficit of the Scheme that was attributable
to past employees of Eleco plc, who were
members of the Scheme as at 31 March 2006,
together with an appropriate proportion of
liabilities relating to orphan beneficiaries
of the Scheme as at that date.
www.eleco.com
Eleco plc discharged this obligation on
21 September 2012 by the payment of
£595,000 to the Scheme and the Board has
been advised that accordingly, by law, Eleco
plc is no longer a Statutory Employer of the
Scheme under Section 75 and 75A of the
Pensions Act 1995 and Part 3 of the Pensions
Act 2004 and that as a consequence, Eleco
plc will no longer be directly responsible for
funding the Scheme’s current deficit or future
funding, or for the payment of expenses incurred
by the Scheme; Bell & Webster Concrete Limited,
SpeedDeck Building Systems Limited, Stramit
Panel Products Limited and Eleco (GNS) Limited
continue as Statutory Employers of the scheme.
Outlook
More than three quarters of ElecoSoft®’s profits
were made in the Swedish and German markets,
but our UK software interests experienced
difficult trading conditions in the UK due to a
continuing lack of demand in the construction
industry, which affected its performance.
Looking forward, our software teams have
the flair, creativity and technology, to produce
well-designed and relevant software programs
and we are confident that with good management
and marketing, ElecoSoft® will now be able to
take advantage of opportunities for further
profitable expansion as they arise.
The period under review saw the restructuring
of our precast concrete interests as well as a
welcome improvement in the performance of
our roofing and cladding operations. However
this improvement was not sufficient to return
ElecoBuild® to profit in the period. ElecoBuild®’s
costs and production capacity over the past
three years have been substantially reduced so
as to bring them into line with the lower levels
of activity in the UK construction industry and
3
as a consequence, we believe that ElecoBuild®
is now in a better position to respond and take
advantage of an upturn in demand.
The past three years have been about steering
Eleco through financial and trading conditions,
the severity of which have been unprecedented.
These conditions have abated to a degree,
but continue to be challenging. Against this
background, our management have had to
take some very difficult decisions and actions
in their efforts to return Eleco to profitability
and they remain committed to achieving this
objective, for the benefit of shareholders and
employees alike.
I continue to believe that further to our
restructuring, Eleco is well placed to take
advantage of improvements in the markets
it serves and I look forward to our capturing
the benefits of these changes over the
coming months.
John Ketteley
Executive Chairman
25 September 2012
Overview
Financials
4
Eleco plc | Interim Report 2012
Condensed Consolidated
Income Statement
for the financial period ended 30 June 2012
Six months to 30 June
Notes
Revenue
Cost of sales
3
Gross profit
Distribution costs
Administrative expenses
18 months
ended
31 December
2011
£’000
2012
(unaudited)
£’000
2011
(unaudited)
£’000
18,354
(8,879)
18,255
(8,554)
56,822
(27,220)
9,475
(948)
(8,479)
9,701
(1,435)
(8,600)
29,602
(4,651)
(24,808)
(365)
Operating profit/(loss) before exceptionals
Exceptional items
5
48
(316)
(334)
(195)
Loss from operations
Finance income
Finance cost
3
6
6
(268)
24
(236)
(529)
27
(158)
(804)
(480)
(127)
(660)
(187)
(279)
(607)
(252)
(847)
(2,789)
(1,528)
Loss for the financial period
(859)
(3,636)
(2,737)
Attributable to:
Equity holders of the parent
(859)
(3,636)
(2,737)
Loss before tax
Tax
Loss for the financial period from continuing operations
Loss for the financial period from discontinued operations
4
143
(222)
96
(930)
(1,209)
Loss per share – basic and diluted
Continuing operations
Discontinued operations
7
7
(1.0)p
(0.4)p
(1.4)p
(4.7)p
(2.0)p
(2.6)p
Total operations
7
(1.4)p
(6.1)p
(4.6)p
www.eleco.com
5
Condensed Consolidated Statement
of Comprehensive Income
for the financial period ended 30 June 2012
2012
(unaudited)
£’000
2011
(unaudited)
£’000
18 months
ended
31 December
2011
£’000
Loss for the period
Other comprehensive income
Actuarial (loss)/gain on retirement benefit obligation
Deferred tax on retirement benefit obligation
Other losses on retirement benefit obligation
Translation differences on foreign currency net investments
(859)
(3,636)
(2,737)
(367)
(11)
—
(26)
(119)
(126)
—
(98)
3,720
(1,461)
(493)
(220)
Other comprehensive income net of tax
(404)
(343)
1,546
Total comprehensive income for the period
(1,263)
(3,979)
(1,191)
Attributable to:
Equity holders of the parent
(1,263)
(3,979)
(1,191)
Six months to 30 June
Overview
Financials
6
Eleco plc | Interim Report 2012
Condensed Consolidated Statement
of Changes in Equity
for the financial period ended 30 June 2012
At 1 January 2012
Share
capital
£’000
Share
premium
£’000
Merger
reserve
£’000
6,066
6,396
7,371
Translation
reserve
£’000
(113)
Other
reserve
£’000
(358)
Retained
earnings
£’000
(5,207)
Total
£’000
14,155
Transactions with owners
—
—
—
—
—
—
—
Loss for the period
Other comprehensive income:
Actuarial loss on defined benefit pension scheme net of tax
Exchange differences on translation of net investments
in foreign operations
—
—
—
—
—
(859)
(859)
—
—
—
—
—
(378)
(378)
—
—
—
(26)
—
—
(26)
Total comprehensive income for the period
—
—
—
(26)
—
(1,237)
(1,263)
6,066
6,396
7,371
(139)
(358)
(6,444)
12,892
Share
capital
£’000
Share
premium
£’000
Merger
reserve
£’000
Translation
reserve
£’000
Other
reserve
£’000
Retained
earnings
£’000
6,066
6,396
7,371
217
(358)
(4,889)
14,803
Transactions with owners
—
—
—
—
—
—
—
Loss for the period
—
—
—
—
—
(3,636)
(3,636)
—
—
—
—
—
(245)
(245)
—
—
—
(98)
—
—
(98)
At 30 June 2012 (unaudited)
At 1 January 2011
Other comprehensive income:
Actuarial loss on defined benefit pension scheme net of tax
Exchange differences on translation of net investments
in foreign operations
Total comprehensive income for the period
At 30 June 2011 (unaudited)
Total
£’000
—
—
—
(98)
—
(3,881)
(3,979)
6,066
6,396
7,371
119
(358)
(8,770)
10,824
Share
capital
£’000
Share
premium
£’000
Merger
reserve
£’000
Translation
reserve
£’000
Other
reserve
£’000
Retained
earnings
£’000
Total
£’000
6,066
6,396
7,371
107
(358)
(4,236)
15,346
Transactions with owners
—
—
—
—
—
—
—
Loss for the period
Other comprehensive income:
Actuarial gain on defined benefit pension scheme net of tax
Exchange differences on translation of net investments
in foreign operations
—
—
—
—
—
(2,737)
(2,737)
—
—
—
—
—
1,766
1,766
—
—
—
(220)
—
—
(220)
Total comprehensive income for the period
—
—
—
(220)
—
(971)
(1,191)
6,066
6,396
7,371
(113)
(358)
(5,207)
14,155
At 1 July 2010
At 31 December 2011
www.eleco.com
7
Condensed Consolidated Balance Sheet
as at 30 June 2012
30 June
2012
(unaudited)
£’000
2011
(unaudited)
£’000
31 December
2011
£’000
Non-current assets
Goodwill
Other intangible assets
Property, plant and equipment
Deferred tax assets
Other non-current assets
13,622
2,129
7,570
1,194
865
13,425
2,592
8,863
2,065
—
13,567
2,338
7,909
1,289
800
Total non-current assets
25,380
26,945
25,903
2,254
7,084
85
1,673
460
—
3,526
11,335
—
5,456
—
894
2,281
8,394
—
4,748
400
Total current assets
11,556
21,211
16,263
Total assets
36,936
48,156
42,166
(3,633)
(900)
(161)
(5,285)
—
(900)
(147)
(8,203)
—
(5,900)
(141)
(6,618)
(20)
(191)
(5,432)
(8)
(102)
(6,435)
(60)
(87)
(6,355)
(15,622)
(15,795)
(19,161)
(2,475)
(379)
(396)
(86)
(13,175)
(270)
(27)
—
(2,925)
(359)
(421)
(73)
(111)
(4,975)
(123)
(7,942)
(4,959)
Notes
Current assets
Inventories
Trade and other receivables
Current tax assets
Cash and cash equivalents
Other current assets
Assets of disposal group held for sale
Current liabilities
Bank overdraft
Borrowings
Obligations under finance leases
Trade and other payables
8
8
Provisions
Current tax liabilities
Accruals and deferred income
Total current liabilities
Non-current liabilities
Borrowings
Obligations under finance leases
Deferred tax liabilities
Non-current provisions
8
Other non-current liabilities
Retirement benefit obligation
440
(113)
(8,422)
(21,537)
(8,850)
Total liabilities
(24,044)
(37,332)
(28,011)
Net assets
12,892
10,824
14,155
Equity
Share capital
Share premium account
Merger reserve
Translation reserve
Other reserve
Retained earnings
6,066
6,396
7,371
(139)
(358)
(6,444)
6,066
6,396
7,371
119
(358)
(8,770)
6,066
6,396
7,371
(113)
(358)
(5,207)
Equity attributable to shareholders of the parent
12,892
10,824
14,155
Total non-current liabilities
Overview
Financials
8
Eleco plc | Interim Report 2012
Condensed Consolidated Statement
of Cash Flows
for the financial period ended 30 June 2012
2012
(unaudited)
£’000
2011
(unaudited)
£’000
18 months
ended
31 December
2011
£’000
(429)
556
260
(4)
(402)
(27)
(3,426)
1,189
361
(5)
(463)
(447)
(7,232)
3,078
926
(345)
(1,664)
(987)
(46)
1,517
24
(2,163)
(2,791)
2,955
221
(2,828)
(6,224)
5,586
957
Cash used in operations
Interest paid
Interest received
Income tax paid
(668)
(66)
26
(238)
(2,443)
(94)
119
(173)
(7,076)
(278)
344
Net cash outflow from operating activities
(946)
(2,591)
(7,069)
Net cash used in investing activities
Purchase of intangible assets
Purchase of property, plant and equipment
Acquisition of subsidiary undertakings net of cash acquired
Proceeds from sale of property, plant, equipment and intangible assets
Sale of business net of expenses
(64)
(129)
(46)
45
—
(61)
(251)
—
98
—
(329)
(992)
(316)
908
6,134
(194)
(214)
5,405
Net cash used in financing activities
Proceeds from new bank loan
Repayment of bank loans
Repayments of obligations under finance leases
—
(5,450)
(86)
4,900
(225)
(160)
6,600
(5,675)
(456)
Net cash (outflow)/inflow from financing activities
(5,536)
4,515
469
Net (decrease)/increase in cash and cash equivalents
(6,676)
1,710
(1,195)
Cash and cash equivalents at beginning of period
Effects of changes in foreign exchange rates
4,748
(32)
3,746
—
6,009
(66)
Cash and cash equivalents at end of period
(1,960)
5,456
4,748
Cash and cash equivalents comprise:
Cash and short-term deposits
Bank overdrafts
1,673
(3,633)
5,456
—
4,748
—
(1,960)
5,456
4,748
Six months to 30 June
Notes
Cash flows from operating activities
Loss before interest and tax
Depreciation and impairment charge
Amortisation and impairment charge
Profit on sale of property, plant and equipment
Retirement benefit obligation
Decrease in provisions
Cash used in operations before working capital movements
Decrease in trade and other receivables
Decrease in inventories and work in progress
Decrease in trade and other payables
Net cash (outflow)/inflow from investing activities
9
(7,395)
(59)
www.eleco.com
9
Notes to the Condensed Consolidated
Interim Financial Statements
1. General information
The Company is a public limited company incorporated and domiciled in the UK. The address of its registered office is 66 Clifton Street,
London EC2A 4HB.
The Company is listed on the Alternative Investment Market (AIM).
The condensed consolidated interim financial information does not constitute statutory accounts as defined in section 434 of the Companies Act 2006.
The Group’s consolidated financial statements for the 18 months ended 31 December 2011 have been filed and the audit report was not qualified
and did not contain a statement under section 498(2) or section 498(3) of the Companies Act 2006.
2. Basis of preparation
The condensed consolidated interim financial statements for the six months to 30 June 2012 have been prepared in accordance with the accounting
policies which will be applied in the twelve months’ financial statements to 31 December 2012. These accounting policies are drawn up in accordance
with International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as issued by the International Accounting
Standards Board and as adopted for use in the European Union that are effective at 30 June 2012.
The condensed consolidated interim financial statements are unaudited and have not been subject to review. They do not include all the information
and disclosures required in the annual financial statements and therefore should be read in conjunction with the Group’s published financial statements
as at 31 December 2011.
In accordance with IFRS 5, the prior year comparative figures for the six months to 30 June 2011 have been restated to reflect discontinued operations
reported in the Group’s consolidated financial statements for the 18 months ended 31 December 2011. The comparative figures for the 18 months
ended 31 December 2011 are not the Company’s statutory accounts for that period but have been extracted from these accounts.
The Directors, having considered the Group’s current financial resources, have concluded that they are adequate for the Group’s present
requirements. Thus the condensed consolidated interim financial information has been prepared on the going concern basis.
New accounting standards and interpretations are effective for the first time in the current period but have had no impact on the results or financial
position of the Group. Furthermore, new standards, new interpretations and amendments to standards and interpretations that have been issued
but are not effective for the current period have not been adopted early.
Estimates
Application of the Group’s accounting policies in preparing condensed consolidated interim financial statements requires management to make
judgements and estimates that affect the reported amount of assets and liabilities, revenues and expenses. Actual results may ultimately differ
from these estimates.
In preparing these condensed consolidated interim financial statements, the significant judgements made by management in applying the Group’s
accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for
the 18 months ended 31 December 2011.
Risks and uncertainties
A summary of the Group’s principal risks and uncertainties was provided on page 10 of the 2010/11 report and accounts. The Board considers
these risks and uncertainties are still relevant to the current financial year and the impact of changes in the UK economy is reviewed in the Chairman’s
statement contained in this report.
3. Segmental information
Operating segments
For management purposes, the Group is organised into two operating divisions based on the type of products and services supplied by each
business unit.
The principal activities of each segment are as follows:
ElecoSoft®: Developer and supplier of resource management software, building project software, design and engineering software and 3D design software.
ElecoBuild®: Manufacturer and supplier of precast and prestressed concrete products and a range of building products including metal roofing,
cladding systems, acoustic flooring, floor joist webs and partitioning panels.
Overview
Financials
10
Eleco plc | Interim Report 2012
Notes to the Condensed Consolidated
Interim Financial Statements
continued
3. Segmental information continued
Operating segments continued
The structure of the reportable operating segments has changed from those reported in the 2010/11 report and accounts. This change is a result
of the disposal of various ElecoBuild® operations during the 18 months to 31 December 2011 and consequently the prior year comparatives have been
restated on the revised basis. Unallocated central costs that cannot reasonably be allocated to the operating divisions are reported under Corporate.
Elimination
£’000
Continuing
operations
£’000
ElecoSoft
£’000
ElecoBuild
£’000
Corporate
£’000
Revenue
Inter-segment revenue
8,207
37
10,147
—
—
—
—
(37)
18,354
—
Total segment revenue
8,244
10,147
—
(37)
18,354
Adjusted operating profit/(loss)
Product development
Amortisation of intangible assets
2,227
(1,118)
(206)
(354)
(10)
(54)
(437)
—
—
Operating profit/(loss) before exceptionals
Restructuring costs
903
(1)
(418)
(253)
(437)
(62)
(316)
Segment result
Net finance cost
902
(50)
(671)
(430)
(499)
268
(212)
Profit/(loss) before tax
Tax
852
(1,101)
(231)
Six months to 30 June 2012 (unaudited)
1,436
(1,128)
(260)
48
(268)
(480)
(127)
Loss after tax
(607)
ElecoBuild
£’000
Corporate
£’000
Revenue
Inter-segment revenue
8,330
172
9,925
375
—
—
—
(547)
18,255
—
Total segment revenue
8,502
10,300
—
(547)
18,255
Adjusted operating profit/(loss)
Product development
Amortisation of intangible assets
2,124
(952)
(296)
(592)
(12)
(51)
(555)
—
—
977
(964)
(347)
Operating profit/(loss) before exceptionals
Restructuring costs
876
—
(655)
(105)
(555)
(90)
(195)
Segment result
Net finance cost
876
(22)
(760)
(240)
(645)
131
(131)
Profit/(loss) before tax
Tax
854
(1,000)
(514)
Loss after tax
Elimination
£’000
Continuing
operations
£’000
ElecoSoft
£’000
Six months to 30 June 2011 (restated)
(334)
(529)
(660)
(187)
(847)
www.eleco.com
11
3. Segmental information continued
Operating segments continued
Elimination
£’000
Continuing
operations
£’000
18 months to 31 December 2011
ElecoSoft
£’000
ElecoBuild
£’000
Corporate
£’000
Revenue
Inter-segment revenue
23,047
401
33,775
1,090
—
—
—
(1,491)
56,822
—
Total segment revenue
(1,491)
56,822
23,448
34,865
—
Adjusted operating profit/(loss)
Product development
Amortisation of intangible assets
5,993
(3,027)
(752)
(288)
(25)
(152)
(1,606)
—
—
4,099
(3,052)
Operating profit/(loss) before exceptionals
Impairment charges
Restructuring costs
2,214
(11)
—
(465)
(11)
(255)
(1,606)
—
(88)
143
(22)
(343)
Segment result
Net finance cost
2,203
(83)
(731)
(994)
(1,694)
369
(708)
Profit/(loss) before tax
Tax
2,120
(1,725)
(1,325)
(904)
(222)
(930)
(279)
Loss after tax
(1,209)
Geographical segments
Segment revenue by geographical segment represents revenue from external customers based on the geographical location of the customer.
2012
£’000
2011
£’000
18 months
ended
31 December
2011
£’000
11,934
4,389
1,934
97
11,479
4,354
2,345
77
38,766
11,866
5,899
291
18,354
18,255
56,822
Six months to 30 June
UK
Scandinavia
Rest of Europe
Rest of World
Revenue for the six months to 30 June 2012 restated at prior year exchange rates is £18,495,000.
Overview
Financials
12
Eleco plc | Interim Report 2012
Notes to the Condensed Consolidated
Interim Financial Statements
continued
4. Discontinued operations
During the 18 months to 31 December 2011, the Group sold certain business units within its ElecoBuild® division and reduced its commitment
to other operations within this division. Certain residual incomes and costs relating to the sale and closure of these discontinued operations
which have been included in the income statement are set out below:
Six months to 30 June
2012
£’000
Revenue
Cost of sales
2011
£’000
18 months
ended
31 December
2011
£’000
5
—
9,066
(8,139)
27,039
(22,924)
Gross profit
Distribution costs
Administrative expenses
Other operating costs
Loss on re-measurement
5
—
(166)
—
—
927
(135)
(2,852)
(837)
—
4,115
(443)
(8,099)
(1,902)
Operating loss
Finance income
Finance cost
(161)
15
—
(2,897)
105
(39)
(7,010)
249
Loss before tax
Taxation on discontinued operations
(146)
(106)
(2,831)
42
(6,761)
Loss for the period from discontinued operations
Profit on business disposals after tax
(252)
—
(2,789)
—
(6,968)
Net loss for the period from discontinued operations
(252)
(2,789)
(1,528)
(681)
—
(207)
5,440
5. Exceptional items
Exceptional items represent costs considered necessary to be separately disclosed by virtue of their size or nature.
2012
£’000
2011
£’000
18 months
ended
31 December
2011
£’000
—
—
316
11
—
184
11
11
343
316
195
365
Six months to 30 June
Impairment of intangible assets
Impairment of property, plant and equipment
Restructuring costs
Restructuring costs comprise cash and non-cash costs associated with the Group restructuring programme, mainly in the UK, and primarily relate
to redundancy and business merger costs.
www.eleco.com
13
6. Net finance (cost)/income
Finance income and costs from continuing operations is set out below:
2012
£’000
2011
£’000
18 months
ended
31 December
2011
£’000
Six months to 30 June
Finance income:
Bank and other interest receivable
Finance costs:
Bank overdraft and loan interest
Finance leases and hire purchase contracts
Net return on pension scheme assets and liabilities
24
27
96
(89)
(12)
(135)
(65)
(8)
(85)
(250)
(32)
(522)
Total net finance cost
(212)
(131)
(708)
7. Loss per share
The calculations of the loss per share are based on the total loss after tax attributable to ordinary equity shareholders of the Company and the
weighted average number of shares in issue for the reporting period.
18 months
ended
31 December
2011
Six months to 30 June
2012
Loss after taxation
2011
£(859,000)
£(3,636,000)
£(2,737,000)
Weighted average number of shares in issue in the period
Dilutive effect of share options
59,761,646
—
59,761,646
—
59,761,646
—
Number of shares for diluted earnings per share
59,761,646
59,761,646
59,761,646
Loss per share – basic and diluted
Continuing operations
Discontinued operations
(1.0)p
(0.4)p
(1.4)p
(4.7)p
(2.6)p
Total operations
(1.4)p
(6.1)p
(4.6)p
There is no dilution in the loss per share calculation at 30 June 2012 due to the loss for the period. The diluted loss per share is the same as the
basic loss per share for the current period.
Overview
Financials
(2.0)p
14
Eleco plc | Interim Report 2012
Notes to the Condensed Consolidated
Interim Financial Statements
continued
8. Borrowings
The bank loans and overdrafts are repayable as follows:
In one year or less
Between one and two years
Between two and five years
More than five years
At
30 June
2012
£’000
At
30 June
2011
£’000
At
31 December
2011
£’000
4,533
900
1,575
—
900
10,700
2,475
—
5,900
900
2,025
—
7,008
14,075
8,825
9. Acquisitions
On 14 March 2012 the Group acquired the business and certain assets of Novator Projekstyrning AB, of Sweden, enhancing its range of product
planning software for a total consideration of £83,000. The consideration comprised the payment of £46,000 in cash from the Group’s existing
resources and deferred consideration of £37,000.
An analysis of the provisional fair value of the Novator net assets acquired and the fair value of the consideration paid is set out below:
Book value
£’000
Fair value
adjustments
£’000
Provisional
fair value
£’000
Property, plant and equipment
Inventories
—
2
—
—
—
2
Deferred income
2
—
—
—
—
—
—
—
2
—
Net assets
Goodwill
2
2
81
Total consideration
83
Satisfied by:
Cash
Deferred purchase consideration
46
37
83
Goodwill recognised above contains certain intangible assets that cannot be individually, separately and reliably measured from the acquiree due
to their nature. These items include the value of the management and workforce together with synergies that are expected to be gained from being
part of the Group.
www.eleco.com
15
10. Related party disclosures
Transactions between Group undertakings, which are related parties, have been eliminated on consolidation and are not disclosed in this note.
With the exception of M L Turner, the Directors of the Company had no material transactions with the Company during the six months to 30 June 2012,
other than a result of service agreements. An amount of £73,000 (2011: £51,000) was paid to Shoremountain Ltd of which M L Turner is a director.
This was paid under the terms of a consultancy arrangement by the Group.
An amount of £12,500 (2011: £13,000) was paid to JHB Ketteley & Co Limited under a lease for occupation by the Group of 66 Clifton Street,
London EC2A 4HB.
11. Post balance sheet events
On 21 September 2012, Eleco plc discharged its obligations arising under Sections 75 and 75A of the Pensions Act 1995 by the payment of
£595,000 to the Scheme and the Board has been advised that accordingly, by law, Eleco plc is no longer a Statutory Employer of the Scheme
under Section 75 and 75A of the Pensions Act 1995 and Part 3 of the Pensions Act 2004.
Overview
Financials
Eleco plc | Interim Report 2012
16
Board of Directors and Company Advisors
John Ketteley FCA
Matthew Turner FCA CF
Michael McCullen BSc MBA
Executive Chairman
Appointed Executive Chairman in 1997,
John Ketteley has an investment banking
background. He was formerly Non-Executive
Chairman of BTP plc, Country Casuals plc
and Prolific Income plc.
Group Finance Director
Appointed a Director in January 2011.
Matthew Turner, formerly a partner
in Grant Thornton UK LLP, is currently
a partner in Shore Mountain LLP.
He is Chairman of the Bishop
Stopford School Academy Trust.
Chief Executive – ElecoSoft®
Michael McCullen was founder member
of Asta Development and Managing Director
from 2000 to 2009 leading the company
up to its acquisition by Eleco plc in 2006.
He joined the Board in 2007.
Jonathan Cohen TD MA FCA*
Jonathan Edwards LLB ACA*
Chairman of the Remuneration Committee
and Senior Independent Director
Appointed a Non-Executive Director in
November 2002. Jonathan Cohen was
previously Chief Executive of County
NatWest Limited and Vice Chairman of
Charterhouse Bank Limited. He is currently
Senior Executive Director of Savile Group plc
and Chairman of Clearwater Hampers Limited.
Chairman of the Audit Committee
A Chartered Accountant and Barrister,
Jonathan Edwards a Director of Harpenden
Sports Group Limited.
* Member of the Audit, Remuneration
and Nominations Committees.
Secretary
Ivor A Barton ACIS
Auditors
Grant Thornton UK LLP
Registered office
66 Clifton Street
London EC2A 4HB
Tel: +44 (0)207 422 0044
E-mail: info@eleco.com
Website: http://www.eleco.com
Bankers
Lloyds TSB Bank Plc
Registered number
354915
Nominated Adviser & Broker
Cenkos Securities plc
Solicitors
Berwin Leighton Paisner LLP
Reynolds Porter Chamberlain LLP
Registrars and transfer office
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
Tel: +44 (0)871 664 0300
E-mail: shareholder.services@
capitaregistrars.com
Group Directory
ElecoSoft®
ElecoBuild®
Asta Development plc
Thame, Oxfordshire
Tel: +44 (0)1844 261700 E-mail: astack@eleco.com
Website: www.asta.eleco.com
Developer and supplier of project and resource management software.
Bell & Webster Concrete Limited
Grantham, Lincolnshire
Tel: +44 (0)1476 562277 E-mail: bellandwebster@eleco.com
Website: www.bellandwebster.eleco.com
Manufacturer and supplier of precast concrete RoomSolutions™,
retaining walls and other concrete products.
Asta Development GmbH
Karlsruhe, Germany
Tel: +49 (0)721 95 250 E-mail: astagmbh@eleco.com
Website: www.astagmbh.eleco.com
Supplier of project and resource management software.
Consultec Arkitekter & Konstruktorer AB
Skellefteå, Sweden
Tel: +46 (0)910 87800 E-mail: consultecak@eleco.com
Website: www.consultecak.eleco.com
Architectural consultancy and software reseller.
Consultec Byggprogram AB
Skellefteå, Sweden
Tel: +46 (0)910 87800 E-mail: consultecbp@eleco.com
Website: www.consultecbp.eleco.com
Developer and supplier of building project software.
Consultec System AB
Skellefteå, Sweden
Tel: +46 (0)910 87800 E-mail: consultecsystem@eleco.com
Website: www.consultec.eleco.com
Developer and supplier of design and engineering software.
Consultec UK
Aldershot, Hampshire
Tel: +44 (0)1252 267780 E-mail: consultecuk@eleco.com
Website: consultecuk.eleco.com
Application developer and supplier of CAD solutions to the
timber industry.
Eleco Software Limited
Aldershot, Hampshire
Tel: +44 (0)1252 339132 E-mail: elecosoftwareuk@eleco.com
Website: www.softwareuk.eleco.com
Developer and supplier of 3D design software.
Eleco Software GmbH
Hameln, Germany
Tel: +49 (0)5151 822 390 E-mail: elecosoftwaregmbh@eleco.com
Website: www.softwaregmbh.eleco.com
Developer and supplier of 3D design software.
Esign Software GmbH
Hanover, Germany
Tel: +49 (0)511 856 14340 E-mail: esign@eleco.com
Website: ensign@eleco.com
Developer and supplier of software solutions for the floor
coverings industry.
Downer Cladding Systems Limited
Yaxley, Suffolk
Tel: +44 (0)1379 787215 E-mail: downer@eleco.com
Website: www.downercladding.eleco.com
Supplier and manufacturer of fixing solutions for man-made
and natural rainscreen facade materials.
Milbury Systems Limited
Lydney, Gloucestershire
Tel: +44 (0)1594 847500 E-mail: milbury@eleco.com
Website: www.milbury.eleco.com
Manufacturer and supplier of prestressed and precast
retaining structures.
Prompt Profiles Limited
Yaxley, Suffolk
Tel: +44 (0)1379 787211 E-mail: promptprofiles@eleco.com
Website: www.promptprofiles.eleco.com
Manufacturer and supplier of profiled metal products for the
roofing systems industry.
SpeedDeck Building Systems Limited
Yaxley, Suffolk
Tel: +44 (0)1379 788166 E-mail: speeddeck@eleco.com
Website: www.speeddeck.eleco.com
Manufacturer and supplier of secret-fix and standing seam metal
roofing and Vitesse® wall and rainscreen cladding systems.
Stramit Panel Products Limited
Yaxley, Suffolk
Tel: +44 (0)1379 783465 E-mail: stramit@eleco.com
Website: www.stramit.eleco.com
Manufacturer and supplier of ElecoFloor® acoustic flooring products,
ConCor and CanBerra partitioning panels.
Eleco plc
66 Clifton Street
London EC2A 4HB
Tel: +44 (0)20 7422 0044
E-mail: info@eleco.com
Website: www.eleco.com